Worker-firm matching across places

This Data Insight explores how young workers are matched to firms across local labour markets in England, using the Longitudinal Education Outcomes (LEO) dataset.We focus on differences in 'positive assortative matching' -the extent to which highskilled workers are matched to high-quality firmswhich is assumed to increase productivity in many standard economic models.We find that in London and surrounding areas, highly educated workers are more tightly matched to highquality firms than in other parts of the country, which likely contributes to geographical inequality in wages.Outside London, assortative matching largely takes place through educated workers working in high-paying industries, with virtually no matching within industries.In general, workers and firms are more tightly matched in big cities.However, Birmingham and Manchester have less assortative matching than one would expect given their size.Young workers move firms more often in London and surrounding areas than elsewhere, but the gap in assortative matching emerges in people's first year in the labour market.This work was produced using administrative